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Raters' Moves May Ease Greek Fix

Rollover would trigger default, S&P says, but it might be temporary.

By Boris Groendahl, Dakin Campbell, Bloomberg | Updated on July 05, 2011

Standard & Poor’s and Fitch Ratings may enable European Central Bank President Jean-Claude Trichet to support a private investor rollover of Greek debt by saying a default rating would be partial and temporary.

Trichet put Greece’s fate in the hands of ratings companies when bank officials began saying in May that the ECB, which has lent 98 billion euros ($142 billion) to Greek banks, would refuse to accept the nation’s bonds as collateral if any “burden sharing” by private investors produced a default rating. Growing support for a rollover helped push the yield on Greece’s 2-year bond down 320 basis points to 26.2 percent since June 27.

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